In mid-September, DailyTech brought you news that congress was working on a new round of tax credits targeted at plug-in electric/hybrid vehicles. The tax credits were projected to weigh in at $3,000 for plug-in vehicles with at least a 6 kWh battery and top out at $7,500.

Toyota, which sells its Prius featuring a 1.3 kWh battery pack, balked at the tax credits as its hybrids wouldn't even qualify for the entry-level tax credit. Toyota also was unhappy that the only vehicle in the near future likely to qualify for the maximum $7,500 tax credit is the Chevrolet Volt.

Despite its opposition, Toyota's fears became law last week when President Bush signed the legislation which passed in the House by a vote of 263 to 171 as a part of the massive $700 billion Wall Street bailout package. The entire 10-year tax package for plug-in electric/hybrid vehicles is worth $1 billion.

Requirements to qualify for the tax credit have changed slightly since its inception in the Senate. The 6 kWh battery minimum dropped down to 4 kWh, while the base tax credit rose from $3,000 to $4,168. The maximum credit remains at $7,500 for the Chevrolet Volt with its 16 kWh lithium-ion battery pack.

The Chevrolet Volt gets its primary power from a 150 HP, 273 lb-ft electric motor. A 1.4 liter gasoline engine is also used to recharge the lithium-ion battery pack once the Volt's 40-mile battery range is depleted. According to GM, the Volt can save customers $1,500 per year in fuel costs based on a daily commute of 40 miles.

The $7,500 tax credit should go a long way towards making the Chevrolet Volt more affordable. Current estimates place the base price of the vehicle at $40,000 or higher.

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This article is over a month old, voting and posting comments is disabled

"who want NO rules on capitalism may just learn something about orderly regulation ."

"...look what the market has done to you guys."

The mortgage crisis was not a function of a free market. Government corruption (mostly Democrats buying minority votes), intervention, and moral hazard created the problem.

http://articles.latimes.com/1999/may/31/news/mn-42...>>>All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.>>>Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more.>>>In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.>>>The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers. HUD says Fannie Mae is resisting more low-income loans because they are less profitable.

http://query.nytimes.com/gst/fullpage.html?res=9C0...>>>Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.>>>In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

http://en.wikipedia.org/wiki/Moral_hazard>>>Financial bail-outs of lending institutions by governments, central banks or other institutions can encourage risky lending in the future, if those that take the risks come to believe that they will not have to carry the full burden of losses.

Wood from the trees. Its the "market knows best" attitude that delivered bad policies.Stop looking 10yrs ago, what the hell has your "neo-con" , "deregulate at all costs" government been doing the last 8 yrs? Sitting on the "throne"? The two FMs were a construct of this "blind faith" ideology that markret knows best. How many layers of paper shufflers do you need to house people? Its the ideology that has been driving bad policy. I always thought the quickest way from A to B was a straight line! This FM & FM business always stikes me as artificial and very inefficient.

#1) The problems with ARM's started to show in 2006. These ARM's were not given back in 1994 but far more recently.#2) Republicans ruled the Congress and Senate from about 1995 to 2007. The White House since 2001.#3) Neither Fannie Mae or Freddie Mac were small players in the ARM's market. Fannie Mae and Freddie Mac's problems were they had too much SUB-PRIME mortgage debt. No dodging there.

Blame everything on Freddie Mac and Fannie Mae? Umm, no. The problem is far larger and reaches into far more companies than that. What hand did the federal government or Democrats have in Lehmann Brothers? Was it the federal governments fault that AIG, Wachovia, WaMu and others were about to go insolvent? Stop putting your head in the sand so you can point fingers and feel better. Freddie Mac and Fannie Mae were simply the first to show signs and go down.

Blame everything on Democrats? Umm, your timeline is way off.

Inevitably, EVERYONE in government, the people who got the loans, and the people who gave them is to blame. Painting one single group as the culprits is oversimplifying, ignorant, and knee-jerk. The mortgage mess was caused by lack of regulation. Let me repeat. The mortgage mess was caused by lack of regulation! If you're fine with this happening every once in awhile (and no bailout) then you're a true free market capitalist. This is what free market capitalism, along with growth, can cause. As with all systems, it has its pros and cons.